Diversify Like the Billionaires: A Deep Dive into Oil & Gas Investments | Titan Impact Group

Hey, everyone, it is Katherine and Courtney, and I am super excited to bring you one of the most incredible opportunities for tax mitigation inside of your portfolio. And we talk a lot about making sure that you have, you know, creating those multiple streams of passive income, but making sure it's in different asset classes and not the same asset class. So if you have like, multiple properties, but it's the same asset class, it's still the same bucket. So oil and gas. Oil and gas. Why? Right. We say that success leaves clues, and if you watch where the millionaires and billionaires are going, you want to be paying attention. And so that's why we're having this conversation with Courtney and we're going to be doing these oil and gas deals together. So I'm super excited to share with you, Courtney, and so just share a little bit about your fabulous family's background.

Yeah. No. So I'm originally from Midland, Texas. My dad was a petroleum engineer. My brother drilled oil. My uncle has a well servicing company, and we lived in Abu Dhabi in Pakistan when I was little. And then before my dad retired, he drilled in Jakarta for about 20 years. So back in the 70s, he would put deals together. One of his best friends was a geologist, one was a landman, and they would put deals together and then sell them to Chevron and some of these other major companies. And that was really fortunate for me because he created a company around that I got grandfathered in and I have been able to continue doing these deals with these major companies ever since. I inherited his company 12 years ago and when I got into syndication, thought I was going to be, you know, syndicating multifamily and other asset classes. And then very quickly figured out that the tax benefits and cash flow of oil and gas pair very well with these other investment opportunities. And I thought, you know what? I'm going to stay in my lane. This is a, an asset class where, you know, you really need to have good connections. It is a good old boy network, and who, you know, matters. And I thought, I'm going to take advantage of that and we're going to bring some really amazing opportunities to people in this space.

So I love that this is a perfect example of who, who already knows how. Right. And again, because it is a good old boys network. Let's talk about that. Because clearly these are multibillion dollar companies. They don't really need a few million dollars from us.

They don't. They don't. And so, you know, one of our strategies, or our only strategy is to go in and acquire interests where major oil and gas companies are about to drill or they have already drilled them and we're just waiting for them to complete these wells. So the drilling process, they drill down. Once they're finished with that part, if they're going to frack them, they'll come in, frack them, complete them, you know, get the pump jack on which is a lift if they're going to need them. Depending on the area we're in, um, and then the next thing you know we, we've got, we're online, we're, we're producing oil and everybody's making money. So you want to invest and you want to drill with these major operators. Exxon, chevron, Texaco, Continental, ConocoPhillips, Anschutz Exploration, EOG. The problem is, is they are multi billion dollar companies and they don't need our 5, 10, 15, $20 million to drill. And that's actually the best part of it. So I figured out a way to kind of, I always tell everybody I ride their coattails. I figured out a way to acquire an interest that somebody else owned and I go in and buy it where these people have drilled. So I did. I'm not working directly with EOG. I've just found, let's say they own 85% of the mineral rights in the area. I will find that person that owns that other 15% or 5% or whatever it is and I will go and buy it from them. And so they didn't need our money, they didn't want our money. But I was able to acquire that interest so they don't have a choice. And we do have great relationships with the Landmen at each of these companies and so they're really great at communicating with us and keeping us posted with what's going on with the project and it's been amazing.

So this is incredible. So now inside of this, let's dig down into like the, the, the why and the more the how to mitigate the risk around all of it.

Yeah, no, that's really great. So why even look at oil and gas to begin with? You know it's a great, for so many reasons. You know the, the cash flow is awesome. It's monthly cash flow and obviously every project is going to be different. You know, wells in West Texas are going to differ from wells in North Texas and differ from you know, Wyoming or wherever you are. And is it a previous, you know, pre existing well that they're going to go in and re stimulate? Is it a new well? Is it Fracked, all of those things matter. But most of our projects are going to go in you a, on a $250,000 investment. I mean, you're looking at, you know, 10 to $20,000 a month in cash flow. It's significant, it's significant cash flow. And I know a lot of the asset classes talk about cash flow. You know, the self storage I'm in, I think I get paid $750 a quarter, which is fine, I will take $750 a quarter all day long. But really you, you realize that upside, you know, when the, you know, oh my gosh, when it divests at the end of the, you know, five year term or whatever it is for that project, when they sell oil and gas is opposite, you get a lot of your money back. At least in my projects at very quickly in the beginning, in that 12 to 18 month time frame. So we're talking about substantial cash cash flow and that is really where the momentum and velocity of money comes in. Because when you are deploying it into oil and gas, that's paying back in a 12 to 18 month time frame. You can then take that money and deploy it into real estate or any other asset class. So now in a relatively short time period, you have funded two different opportunities with the same capital because that oil and gas well is going to continue to pay. And now you're in another asset class as well. And it's so important to be diversified because asset classes are cyclical. You know, you might have a really good performing asset over here and maybe oil and gas isn't performing as well. They all vary in function. But if one thing isn't doing so well, you have plenty of other things to cover it. So it's not impacting your lifestyle. So it's a great. Sorry, I didn't mean to.

No, no, yeah, it's a great.

Well, it's a great hedge against inflation because it is tied with what's going on there. So you know, oil is tied into everything. It's tied into all of our products, transportation, it's impacted everywhere and it's a commodity. So if we're seeing downturns in other asset classes, but we're seeing a rise in inflation and things like that, oil is a great place to be. And just like you said earlier, I pay attention to Warren Buffett and Morgan Stan and you know, what are, what is the institutional money doing? And I've saved several articles where, you know, Warren Buffett has moved significant amounts of money into Occidental. A lot of These guys are moving major money into oil and gas, which is a really good indicator that that's somewhere we want to be. And we want to be there and build a really good position over this next couple of years.

So not only be there for the cash flow, be there because that's where the big boys are. Because there's things happening that we're not present to, but clearly they are, and that. Let's talk about the tax advantages of it.

Well, you know, most of my investors come in, you know, for the tax benefits primarily, but also the cash flow and the tax benefits are amazing. They're better than anything you'll see in any other asset class. And, you know, most of the people I work with, their doctors or business owners, and they don't have time to actively be involved in real estate to be able to offset their W2 or ordinary income. And that is the beautiful part of a interest in oil and gas. You can offset any kind of income. Capital gains from the stock market, capital gains from selling real estate, ordinary income, passive income, whatever you need to offset, you can do it with working interest in oil and gas, which is amazing. So let's talk about what that looks like. Let's say you make $500,000 a year. And I'm going to do easy numbers for my little brain right now. And so you do a hundred thousand dollar investment. Our deals typically get anywhere to 90% depreciation in year one. So if you're investing a hundred thousand dollars, and let's say it's 85,000 on this deal or 85% on this year or this deal, you are going to be able to deduct $85,000 from your overall income. So now your taxable income has gone from $500,000 to $415,000. And that translates, you know, depending on what tax brackets you're in, to about $32,000. That's significant. And with the right CPA and tax strategist, they can help you get that tax liability down to zero, which is amazing. So tax benefits, year one. The other beautiful part of oil and gas is you get what's called a depletion allowance on all income that's coming in from those wells, which means that you are only going to pay taxes on 85% of the income. You get a 15% depletion allowance every year on the life of those wells on all production, which is another huge benefit.

It is huge. So let's just talk really quick now about how you mitigate the risk.

And this is so Important I let everybody know if you're looking at a project operator and location matter, you want to be with a very experienced operator. You want to be in a proven location. There are people, you know what they do, what they call wildcatting that are out, you know, drilling wells in random places hoping to hit oil. I don't that I am, that's not my game. That's not what I want to do. I want to be with multi billion dollar companies in proven areas where we can take a look at what's going on. If that area is, you know, producing 700 million barrels or you know, whatever that is, we, we, that's where we want to be. We don't want to be in an unproven area. And then the next important thing is you want multiple wells in your project. You don't ever want to than anything that just has one well because again you're putting all of your eggs in that one basket. You want multiple because this is how you're going to, that's how you're going to protect yourself. You might have one well that outperforms all of the rest. Massive production. You might have a couple that are running right along average for that area. And then you, maybe you have one that's dry or you know, produces only about half of what was expected. They all complement and offset each other. So if you have one that's not performing, the others are going to make up for that. And you want to make sure you have multiple wells in your investment.

I love that. So we've taken care of like what it is, why the investment, the risk, all of it. So this is one of those like this is a no brainer. It's, it's the minimum investment. Let's talk about that.

Yeah, so the minimum investment is 250,000 typically what we see. And I'll use my November deal as a case study as an example. So we closed mid November, all of the wells were online by November 20th. And then we received our very first check on March 26th of 2024. So we closed November of 2023. We passed along 82.66% depreciation for that deal. Everything was online and it was a five million dollar raise. That first check that we got on March 26th was $1.8 million. That is how much we had already earned in that very started paying out. I think the very first check we paid out to everybody returned about 25% of their initial investment on that first, first check. So we have now at this point in time Paid out, let's see, we are in September. We have paid out through May. We pay a month behind. The companies generally pay us about a month behind. And then we've got to take everything, process it, get the reports ready, and then we pay a month behind. So in that six month time period, as of right now, I think we've paid out 4, 40, 42% on that investment at this point in time. Which is awesome.

Absolutely is. Which now allows them to deploy capital into other assets or into more wells.

Right, right. So typically we try to go in and acquire assets that have already been drilled and they're about to come online. We like that because we've mitigated, we've mitigated a lot of the risk because we know if we've hit commercially producible oil or not, we don't run the risk of, you know, drilling a dry well. We know what's going on with it. And typically once they're drilled, completion happens, you know, pretty quickly, within the next month or two and then we can expect payments to start within about three months from that. So we closed out a deal about a month ago and they had just finished there. We know that they're online. We haven't gotten the official notification for it yet, but we are expecting a first distribution for that in probably October, November time frame. So it's pretty quick turnaround. If the wells haven't been drilled, but they've done permits and things, you're looking at probably about a year turnaround. And so every single project's gonna be a little bit different. But just make sure that the person that you're working with knows what they're talking about, they understand the nuances of what's going on and can help and explain it.

I love it. So if you're interested, schedule a call with me, click the link below and Courtney and I will get on and answer all your questions and get you on the VIP list. Because this is like these fill up extremely quickly. It is first come, first serve. People don't sit around, you know, it is.

And Catherine gets a call from me every time because I always end up having to wire money back to people and people are unhappy with that. They don't like me when I have to send, I don't want to have to send money back because they waited, right? Yeah. You can't sit on it and wait because it disappears and it disappears quickly. So there's not a ton of opportunity like that out there. And I, I, this is to hurry up and get it done. I mean, this is really what actually happens. And so I. I ended up with a handful of people that were not happy. They weren't able to get in. And that happens every.

Waited too long. Yeah. So you want to get on our VIP list so that you're the first to know, first to learn about it, first to move and, you know, take advantage of this opportunity for, like, all the amazing reasons. So thank you, Courtney. I'm excited. We're doing amazing things together. We'd love for you all to join us, and we look forward to hearing from you. So bye for now, everyone.

Bye.